Capital spending down at FedEx as full year earnings outlook reduced

FedEx Corporation expects to report earnings of USD 1.58 per diluted share for the second quarter.

FedEx Corporation announced that it expects to report earnings of USD 1.58 per diluted share for the second quarter ended November 30. Previous earnings guidance for the quarter was USD 1.40 to USD 1.60 per diluted share. For fiscal 2009, the company has reduced its earnings guidance to USD 3.50 to USD 4.75 per diluted share from the previous guidance of USD 4.75 to USD 5.25, as significantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market. This outlook assumes stable fuel prices.

“Second quarter results benefited from rapidly declining fuel prices and continued cost management,” said Alan B. Graf, Jr., Executive Vice President and Chief Financial Officer. “However, demand for our services weakened sequentially throughout the quarter and global economic trends continue to worsen, substantially reducing our second half outlook. We are adjusting our expense plans to more closely align with the weaker business conditions, and are now targeting capital spending of USD 2.5bn for fiscal 2009, down from USD 3.0 bn at the start of the year.”